Income Tax Assessment Act 1997

CHAPTER 2 - LIABILITY RULES OF GENERAL APPLICATION  

PART 2-10 - CAPITAL ALLOWANCES: RULES ABOUT DEDUCTIBILITY OF CAPITAL EXPENDITURE  

Division 40 - Capital allowances  

Subdivision 40-G - Capital expenditure of primary producers and other landholders  

Operative provisions

SECTION 40-630   Landcare operations  

40-630(1)  
You can deduct capital expenditure you incur at a time in an income year on a * landcare operation for:


(a) land in Australia you use at the time for carrying on a * primary production business; or


(b) rural land in Australia you use at the time for carrying on a * business for a * taxable purpose from the use of that land (except a business of * mining and quarrying operations).

Note:

If Division 250 applies to you and an asset that is land:

  • (a) if section 250-150 applies - you are taken not to be using the land for the purpose of carrying on a primary production business, or a business for the purpose of producing assessable income from the use of rural land (except a business of mining and quarrying operations), to the extent specified under subsection 250-150(3) ; or
  • (b) otherwise - you are taken not to be using the land for such a purpose.
  • 40-630(1A)  


    A * rural land irrigation water provider can deduct capital expenditure it incurs at a time in an income year on a * landcare operation for:


    (a) land in Australia that other entities use at the time for carrying on * primary production businesses; or


    (b) rural land in Australia that other entities use at the time for carrying on * businesses for a * taxable purpose from the use of that land (except a business of * mining and quarrying operations);

    being entities supplied with water by the rural land irrigation water provider.

    40-630(1B)  


    A rural land irrigation water provider is:


    (a) an * irrigation water provider; or


    (b) an entity whose * business is primarily and principally the supply (otherwise than by using a * motor vehicle) of water to entities for use in carrying on * businesses (except businesses of * mining and quarrying operations) using rural land in Australia.

    Exception: plant

    40-630(2)  
    However, you cannot deduct an amount under this Subdivision for capital expenditure on * plant, except:


    (a) a fence erected for a purpose described in paragraph 40-635(1)(a) or (b); or


    (b) a dam or structural improvement (except a fence) covered by paragraph (1)(c), (d), (e) or (f) of the definition of plant in section 45-40 .

    40-630(2A)  


    In applying paragraph (2)(b) to capital expenditure incurred by a * rural land irrigation water provider on a dam or structural improvement, the requirement in paragraph 45-40(1) (c) that the land on which the dam or structural improvement is situated be used for agricultural or pastoral operations is to be disregarded. Exception: deduction available under Subdivision 40-F

    40-630(2B)  


    A * rural land irrigation water provider cannot deduct an amount under this Subdivision for capital expenditure if the entity can deduct an amount for that expenditure under Subdivision 40-F . Exception: deduction available under Subdivision 40-J

    40-630(2C)  


    You cannot deduct an amount under this Subdivision for capital expenditure if any entity can deduct an amount for that expenditure for any income year under Subdivision 40-J . Reduction of deduction

    40-630(3)  
    You must reduce your deduction by a reasonable amount to reflect your use of the land in the income year after the time when you incurred the expenditure for a purpose other than the purpose of carrying on:


    (a) a * primary production business; or


    (b) a * business for the * purpose of producing assessable income from the use of rural land (except a business of * mining and quarrying operations).

    40-630(4)  


    Subsection (3) does not apply to expenditure incurred by a * rural land irrigation water provider. Instead, a rural land irrigation water provider must reduce its deduction in relation to particular land by a reasonable amount to reflect an entity ' s use of the land in the income year after the rural land irrigation water provider incurred the expenditure for a purpose other than a * taxable purpose.

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